IATA: Airlines Face Extra $100bn Jet Fuel Bill This Year

• Aviation fuel prices expected to rise 70% across 2026 

• Global industry profits to halve to $23bn

• Association says Nigeria among most expensive countries for airlines

Emmanuel Addeh in Abuja and Chinedu Eze in Lagos

Airlines will have to spend an extra $100 billion on jet fuel this year, with fares ‘inevitably’ rising to cover the bill after the war with Iran choked off oil supplies, the International Air Transport Association (IATA) has stated.

With jet fuel prices expected to be 70 per cent higher across 2026, the airlines body  said that collective industry profits worldwide would halve to $23 billion. Some carriers would struggle to survive the fuel price shock caused by the closure of the strait of Hormuz in March, it said.

Speaking at IATA’s summit in Rio de Janeiro, its Director General, Willie Walsh, stated that as crude oil prices escalate, fares charged by the airlines will also have to increase.

“High oil prices will inevitably mean higher ticket prices. There’s just no way to avoid that,” he was quoted by The Guardian UK as saying.

Walsh said industry polling showed passengers were now braced for higher fares and prepared to spend more, but added: “The big unknown is how long travellers and shippers can tolerate the higher costs of connectivity.”

Stressing that it was a “challenging and unpredictable time”, with “wafer-thin margins,” Walsh said that concerns about possible fuel shortages were now over, despite the soaring costs, and compared with Covid, it was not a crisis.

“It’s going to be very challenging and for a lot of airlines the increase in the fuel bill is potentially existential,” he pointed out.

“You’re looking at an industry that is still profitable and still forecasting growth,” said Walsh. “Traffic is up 2 per cent. If you factor out the impact on the Middle East for the rest of the world it remains a pretty positive environment,” he explained.

For his part, Chief Executive of British Airways, Sean Doyle, argued that long-haul and business passengers may face the bulk of the fare increases. Speaking on the fringes of the conference, Doyle said there would be “no getting away from it – if fuel goes up, fares have to go up”.

However, Doyle suggested that more price-sensitive short-haul holiday flights would be the last to increase: “A brand like BA, which has got a lot of long haul, a lot of corporate, a lot of premium; we’d expect maybe to have more pass-through of prices than maybe a carrier who’s solely competing for leisure short haul.”

According to research from IATA, around half of passengers were prepared to spend substantially more on fares should they track the price of oil, which Walsh said “bodes well” for a strong northern summer season for the industry.

Meanwhile, for the umpteenth time, IATA has identified Nigeria as one of the most expensive countries in the world in which to operate an airline, citing high operational costs that continue to challenge the viability and growth of local carriers.

Speaking at the IATA Annual General Meeting (AGM) held in Brazil, the global body’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, said that despite ongoing efforts by Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, to reform and improve the aviation sector, airlines in the country still face significant cost pressures.

According to Al-Awadhi, the high-cost environment has made it difficult for Nigerian airlines to remain competitive and profitable, limiting the sector’s ability to reach its full potential.

He noted that excessive taxes, charges, and other operational expenses continue to burden airlines across the region, with Nigeria ranking among the most challenging markets from a cost perspective.

To address the issue, Al-Awadhi urged member states of the Economic Community of West African States (ECOWAS) to implement the proposed 25 per cent reduction in aviation taxes and charges. He said the measure would help lower the cost of air travel, stimulate passenger traffic, and improve the competitiveness of airlines operating within West Africa.

Awadhi has repeatedly highlighted that Nigeria was one of the most expensive and difficult places to conduct airline business globally.

Research presented by Awadhi during the African Aviation Conference a few years ago in Abuja and published by THISDAY had revealed that the Nnamdi Azikiwe International Airport in Abuja ranks as the most expensive airport in Africa, closely followed by the Murtala Muhammed International Airport in Lagos.

Al-Awadhi noted that the government imposes at least 27 different charges on airlines. The IATA vice president berated Nigeria for making it difficult for Nigerian airlines to operate profitably by using high airport charges to abort their growth.

 “In a recent research conducted, we discovered that the most expensive airport in Africa is Abuja airport, followed by Lagos airport, with all these exorbitant charges, Nigerian airlines can’t compete with their foreign counterparts.

“Africa has put itself in a place where it cannot help its own, expensive fuel, excessive charges, leasing and insurance through the roof, the airlines need to be financially viable too. The airlines contribute to the country’s GDP but Nigeria needs to decide what to do for them to survive,” he had said.